Do We Need Amazon as a Tax Collector?

( – promoted by Rob “EaBo Clipper” Eno)

There was a hearing on Thursday on Beacon Hill to debate / discuss whether internet retailers should be required to collected sales taxes on purchases by MA residents regardless of whether the internet retailer has a physical presence in MA or not.  Many arguments have been made to support this “Amazon Tax”, named after the wildly successful on-line retailer.  From the fairness to the brick and mortar mom and pop shops in MA who are being placed at an unfair disadvantage because of the sales tax that they must assess on purchases, but Amazon does not to the amount of revenue purported to be “lost” by not collecting sales taxes on these purchases there is no end to arguments for this type of tax.

Local media has been full of articles about this discussion and the benefits of such a tax http://www.metrowestdailynews….

To which I say – Why do we need a new law or set of regulations when we already have many in place that should be collecting the very revenue to which the folks on Beacon Hill point and would place local retailers on a similar footing as on-line retailers.  Yes, I am talking about the Use Tax that MA has that requires all purchases on which a sales tax was not paid but on which a sales tax would have been paid were the purchase made in MA to pay a Use Tax at the same rate as the sales tax.

As with so many issues to do with laws, its not about the need for new laws, its about the need to enforce the compliance with existing laws.

We are entering the home stretch for federal and state income taxes.  On the state income tax forms we file in MA there is a line to fill in for purchases subject to the use tax.  How many people actually fill in the form and pay the tax?  Not surprisingly, very few.  So rather than work to find ways to enhance compliance with the existing laws, MA is looking to place the burden on the on-line retailers to collect and remit the taxes for them.  

I say NO.  Make the state work at enforcing the existing rules.  Yes, seek ways to obtain information from Amazon and others on MA purchases to compare them to tax filings.  That’s fair, based on enforcing MA resident compliance with existing laws and does not require Amazon and others to become tax collectors.  

I also think it would benefit fiscal conservatives as those who are required to write a check at the end of the year because of sales tax would have a different view on the amount of taxes they pay much the same way I believe that stopping payroll tax withholding and requiring people to write checks quarterly or annually would bring a new appreciation for how much in taxes one is actually paying.

So let’s not create more laws because the state is too lazy to enforce the ones we already have.

About ConsEph

  • I prepared tax returns for 25 years. Not once did a client report purchases on their MA form 1 and pay a use tax.  

  • I say NO.  Make the state work at enforcing the existing rules.  Yes, seek ways to obtain information from Amazon and others on MA purchases to compare them to tax filings.  That’s fair, based on enforcing MA resident compliance with existing laws and does not require Amazon and others to become tax collectors.

    So we’d need an army of accountants to compare information from amazon with tax filings, versus just having the sales tax at the point of sale which is the way we do it for brick and mortar businesses.

  • ‘Net tax isn’t wired for fairness

    By Michael Graham

    http://www.bostonherald.com/ne

    Internet sales and tax fairness

    Boston Business Journal

    http://www.bizjournals.com/bos

    A group led by the Retailers Association of Massachusetts has filed a bill to compel online retailers to collect more sales tax in Massachusetts.

    What’s the deal with the Retailers Association of Massachusetts?  Are they a real organization?  How well do they actually represent the feelings of retailers?

  • Vote3rdpartynow

    Massachusetts has a 6.25% sales tax.  That is a tax applied to the purchase and use of goods within the state borders.  What about people that live in Massachusetts and vacation in New Hampshire?  While vacationing far from the Massachusetts border in the White Mountains, should they pay tax on the goods they use while outside the state?  If so, then the tax is seemingly applied to the ‘Massachusetts’ person, and not the use of the goods.  There is no way to prove that the goods purchased by a Massachusetts resident were used within the confines of the state of Massachusetts.

    Also, what right does the state of Massachusetts have to audit retail companies that operate exclusively outside the state?  If Joe-Six-pack had a retail store in Nashua, New Hampshire, and absolutely no business presence within the borders of Massachusetts, under what authority does the state of Massachusetts have the right to search Joe’s customer base and sales records?  Answer: None!  Massachusetts can not regulate/monitor the business operations of a company in another state.  And if it tried, I am sure the state of New Hampshire would have a lot to say about it.  I think NH would tell MA to go f*ck itself.  (Which, no doubt, I would pay to see!!)  New Hampshire actually works to protect its businesses from outside interference!!  Do we really think the state of NH has gone to the trouble of attracting Massachusetts businesses to their state so that Massachusetts could come over the border and start taxing them?  Not in this lifetime….

    And lastly, trying to tax sales on Amazon would be a clusterf*ck.  Think about the complicated mess that would result.  The goods were sold via the Internet from Amazon’s headquarters in Seattle, Washington, and trucked from their warehouse in Kentucky, across several state borders to Massachusetts to someone that may end up using it out of state.  Who pays the tax and at what rate?  Do we pay Washington’s sales tax rate, Kentucky’s sales tax rate, or Massachusetts’ sales tax rate?  And how does Deval Patrick prove the item was consumed in Massachusetts?  

    The birdbrain liberals should think about how to lower the current sales tax rate in order to remain somewhat relevant and competitive in today’s inter-state commerce.

  • .  From the fairness to the brick and mortar mom and pop shops in MA who are being placed at an unfair disadvantage because of the sales tax that they must assess on purchases…

    I do not buy something online to evade sales tax….I do so out of convenience.  

    I drive to NH to evade sales tax on those things I must touch before buying.

  • set some type of precedent in this already?  If memory serves the DOR and Patrick attempted to force one of the big tire sellers  in NH to collect MA state sales tax when then knew the vehicle was from MA (since it is pretty obvious by the license plate).  The tire company told them to go pound sand and the courts did as well.

    The original story is here

    http://www.boston.com/news/loc

    And how pray tell would they enforce this with an online retailer?  Is Amazon going to be required to open it’s records to the DOR upon request?  Don’t see going very far before it landed in courts.  We went through this with online cigarette sales….most of which were run by Native Americans…they STILL have not been able to compel them share their financial information.  The state however did join with several other states and get enough info to send a few poor saps a bill for the use tax…they got it by asking UPS and Fedex “Can we please see your records”.  And the shipping companies accommodated them…but the ones who used the USPS skated…so Congress then made it illegal to ship tobacco by mail…which went over really big with overseas troops who were getting them by mail from family members….I’d have to check, but I think this was undone as well (been a while since I looked into it) because the online tobacco retailers are still there.

    I see this as being easy to legislate, but not nearly easy easy to put in practice and actually create a net revenue gain.

  • Would not be surprised to see Amazon have some type of overseas corporation or something to avoid the affiliate state tax issue.  That’s what Microsoft has done with patents in Ireland…

  • Graydon

    The internet is only 1 place where MA residents can go to escape the sales tax. Remember the DOR’s 2009 attempt to get Town Fair Tire to collect MA Sales tax in their NH Stores on MA Residents?  Or who was the State Rep who voted for the alcohol sales tax and then was busted stocking up in NH.

    The real issue is MA Retailers are losing to low tax states like NH and internet Sales.  But instead of focusing on how increase “fairness” by imposing new taxes we should be focusing making our tax structure more competitive.

    Dan Winslow is pushing one such idea.  http://www.livefreeandbuy.org/

    Dan’s proposal would give MA residents a Dollar for Dollar tax credit for MA Sales tax paid on your state income taxes up to $300 ($4,800 worth of Purchases).